Question

Beowulf and Grendel, a public accounting firm in London, is engaged in the preparation of income tax returns for individuals. The firm uses the weighted-average method of process costing for internal reporting. The following information pertains to February. (£ denotes the British monetary unit, pounds sterling.) *
Returns in process, February 1:
(20% complete)....................................................... 300
Returns started in February................................................. 900
Returns in process, February 28:
(75% complete)............................................................... 400
Returns in process, February 1:
Labor.................................................................................. £ 3,500
Overhead........................................................................... 4,000
Labor, February (4,500 hours)............................................ 90,000
Overhead, February............................................................ 51,000
*Although the Euro is generally used throughout Europe, day-to-day business in the United Kingdom continues to be conducted in pounds sterling.

Required:
1. Compute the following amounts for labor and for overhead:
a. Equivalent units of activity.
b. Cost per equivalent unit. (Remember to express your answer in terms of the British pound sterling, denoted by £.)
2. Compute the cost of returns in process as of February 28.



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  • CreatedApril 22, 2014
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